IMF cancels $100 million of Ebola debt after intense pressure

IMF cancels $100 million of Ebola debt after intense pressure

The IMF has announced that it will cancel almost $100 million of debt owed by Guinea, Liberia and Sierra Leone.

The International Monetary Fund (IMF) has announced that it will cancel almost $100 million of debt owed by Guinea, Liberia and Sierra Leone, while lending $160 million in new loans.

The decision follows intense pressure from grassroots organisations and international and national NGOs.

Tim Jones, Policy Officer at Jubilee Debt Campaign in Britain, commented: “The cancellation of debt payments coming due over the next two to four years is a welcome step in helping with the impact of Ebola. But the lending of more money means that Guinea, Liberia and Sierra Leone’s debt will actually increase. Grants should be given to cope with the impact of Ebola, not more loans which leave an unjust debt to be repaid over the next decade.”

Abu Bakarr Kamara from the Budget Accountability Network in Sierra Leone added: “This is good news .The debt relief by IMF is a welcome one for Sierra Leone. However, the devastation caused by Ebola on our health system requires sustained and progressive investment in the health sector for the next five years. Cancelling all Sierra Leone’s debt would contribute greatly to improve our health systems hence contributing towards achieving the Millennium Development Goals.”

The debt of Guinea, Liberia and Sierra Leone to the IMF will increase from $410 million to $620 million over the next three years, despite this debt cancellation, because of new loans. The IMF has made almost $9 billion in surplus from its lending over the last three years, which is sitting unspent in its reserves.

Tim Jones continued: “The IMF can easily afford to cancel all the $620 million debt of Guinea, Liberia and Sierra Leone which will remain. It should do so. Moreover, other lenders should also cancel debts owed to them. The three countries are due to pay $11 million to the World Bank over the next year. For the World Bank to demand that this money is paid would be scandalous.”

The announcement is implementing a G20 commitment made in November 2014 to provide $300 million of additional “debt relief, grants and loans” to Guinea, Liberia and Sierra Leone through the IMF. In reality, the total debt relief and loans that have been announced total only $260 million.

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